High energy prices and other issues are threatening Germany’s economy, according to analysts at the Wall Street Journal. Once, “Made in Germany” was synonymous with quality and progress, but now the country faces a crisis.
Germany, which once became the world’s third-largest economy thanks to its industrial sector, is now witnessing a decline in its economic performance.
Key problems outlined in the article:
The country’s GDP has fallen for two consecutive years, which hasn’t happened since 1951.
Industrial production has decreased by 15% since 2018, and the number of jobs in the sector has dropped by 3%.
The metallurgical and electrical engineering industries may lay off up to 300,000 workers in the next 5 years.
Energy costs in Germany are significantly higher than in the US and other developed countries.
High taxes take nearly half of citizens’ incomes.
Since 2021, 300 billion euros of investment capital have left Germany, as companies prefer to save rather than invest in innovative projects. The situation is worsened by external economic tensions. The US, Germany’s largest buyer of goods, is not rushing to help. On the contrary, Trump’s threats to increase customs tariffs could strike even harder at Germany’s export-oriented economy, which depends on foreign markets.
However, analysts believe that the most alarming issue is the lack of a clear plan from German politicians to restore the economy. Without export growth and new ideas, the country risks not only experiencing an economic downturn but also losing its industrial power, the newspaper notes.
